UNIFIED COMMERCE AND THE CUSTOMER EXPERIENCE. A buy online, pickup in store mystery shopping study A RESEARCH REPORT BY:

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1 UNIFIED COMMERCE AND THE CUSTOMER EXPERIENCE A buy online, pickup in store mystery shopping study A RESEARCH REPORT BY:

2 TABLE OF CONTENTS Introduction The 4 BOPIS Study Phases Food-for-Thought Questions Why A Buy Online and Pickup In Store (BOPIS) Study? Survey Methodology 4 Phases of the BOPIS Shopping Experience Apps The Check-Out Process Post-Purchase Communication The In-Store Experience BOPIS Must-Have Requirements and Areas of Improvement BOPIS Report Card

3 INTRODUCTION As consumers become increasingly more demanding in their desire for an efficient and unified shopping experience, the role of the retail store is shifting. If consumer expectations and experiences ultimately determine a multichannel retailers success in acquiring and winning repeat business, then it is essential that retailers put themselves in a position to better accommodate shopper demands. One way to satisfy consumers is by offering in-store pickup fulfillment. A win-win strategy for all involved, in-store pickup helps shoppers get their products quickly and on their schedule, while eliminating shipping expenses and driving in-store sales for retailers. But this increasingly popular fulfillment method requires sophisticated coordination between your retail commerce technology and store associates, making it challenging to implement and maintain. To shed light on how leading retailers are succeeding with in-store pickup, Multichannel Merchant, the e-tailing group and Kibo collaborated to develop a buy online pickup in store (BOPIS) mystery shopping study that would shed light on the consumer experience, while providing insight and recommendations for today s multichannel retailer on succeeding with this coveted omnichannel fulfillment strategy. From ordering a product on the retailers mobile app, to visiting the store to purchase or exchange the item, how did the study s 30 omnichannel retailers perform? What elements of the process were consistent between all 30 merchants (in-store pickup must-have requirements) and what areas could the retailers improve? In this report, learn from the best on how to satisfy today s consumer, while also gathering tips and tricks on areas where you can outshine the leaders.

4 THE 4 BOPIS STUDY PHASES We share the facts and the findings from our research. Our tone is purposely prescriptive as our goal is for retailers to execute for shopper satisfaction and bottomline profits. Insights are included at every step suggesting ways to optimize BOPIS shopping experiences. We recommend tailoring these recommendations for your brand, your business and your customer base, striving for excellence in every aspect of this shopper s journey. I. Apps II. The Check-Out Process III. Post-Purchase Communication IV. The In-Store Experience

5 FOOD-FOR-THOUGHT QUESTIONS Is buy online, pick up in store right for my business? Evaluate if your product categories and your store footprint to know if BOPIS fits the bill and if you have the logistics to properly support the unique aspects of the service. What are the foundational elements of such a unified shopping experience? Review all of the elements that were evaluated as part of our research and ensure your execution is flawless from apps to in-store fulfillment. How effective is the experience you are deploying today? Grade your current experience by testing your efforts today against those of your competitors and compare to the omnichannel 30 retailers reviewed in this research. What do shoppers expect from every phase of the BOPIS experience? Start with shopper expectations and see how you stack up against their predefined needs. What must you do to compete with top retailers? Review the findings to see where there are gaps in what you are delivering and areas that suggest room for improvement. What can you do better than leading retailers to differentiate? Define the areas where you can deliver a better experience than your competitors and prioritize a roadmap to reach those goals. What technology can help you deliver great in-store pickup service? Assess your requirements from a technology standpoint so that you have the platform and tools in place to facilitate a smooth BOPIS shopping experience.

6 WHY BUY ONLINE AND PICKUP IN STORE STUDY? Buy Online, Pickup In Store is the Cornerstone of Omnichannel, Yet Retailers Aren t Meeting Expectations 94% of retailers, suppliers and logistics firms surveyed haven t executed a long-term omnichannel strategy, and 37% don t even have one 1 Only 11% of companies are ready for cross-channel fulfillment 1 Retailer and supplier pressure growing from rising consumer expectations, with 75% of retailers experiencing increased demand for more rapid fulfillment 1 54% of all U.S. retail sales are forecast to be influenced by the web in 2015 (1.8 trillion) 67% While I welcome the convenience of shopping online, sometimes it s just easier/more efficient to have the product sent to the physical store for pickup 3 Sources: 1-Retail Insight; 2-Forrester Research 3- E-tailing group 2015 Omnichannel Research

7 INVENTORY TRANSPARENCY CRITICAL FOR MAKING CROSS-CHANNEL PURCHASES How critical are the following omnichannel inventory/delivery services and profile information in selecting a retailer, where you will ultimately make a purchase? Locating products prior to making a store visit 47% Desirable 46% Essential In-Store Pickup 55% Desirable 29% Essential Reserve in Store 58% Desirable 28% Essential E-tailing group 2015 Omnichannel Research

8 E-TAILING GROUP METHODOLOGY IN 2016 The e-tailing group has mystery shopped retailers for 20 years and was first to monitor buy online, pickup in store as early as 2009 when promises were made by retailers that included Best Buy, Circuit City, JCPenney, Office Depot and others. Over the past 10 years, the phenomenon has grown and is no longer an option for a retailer but rather a mandate in order to remain competitive in today s omnichannel climate. We began with apps and, rather than conduct an exhaustive survey of all functionality, we instead opted to zero in on convenience tools that either connect shoppers to stores or features that make the in-store shopping more efficient. The ability to facilitate fast in-store shopping should emanate from using the app in advance of one s visit and serves as the natural first step in the process. Secondly, tools that optimize the in-store experience such as mapping and access to one s order can serve as differentiators while visiting the store. The user experience that is presented as part of the checkout process facilitates conversion. Following up with timely and accurate communication then gives shoppers the knowledge they need to have a successful store visit. It s up to the retailer to then close the loop with a wellexecuted experience that leverages technology and the power of the store associate. Methodology Selected 30 retailers that offered in-store pickup or reserve Reserved or purchased a product for pickup at a local store, tracking the retailer s communication subsequent to placing the order Picked up the purchase in store to experience the process firsthand Noted all aspects of the experience from wait time to associate interaction, as well as signage Defined a set of 85 metrics to evaluate an end-to-end omnichannel experience

PHASE 1: SHOPPING ON THE MOBILE APP The role of apps is to provide omnichannel shoppers with a tool that allows them to quickly access complete information at their fingertips and to enrich the

9 PHASE 1: SHOPPING ON THE MOBILE APP The role of apps is to provide omnichannel shoppers with a tool that allows them to quickly access complete information at their fingertips and to enrich the in-store experience. Consistency across all channels and devices is optimal though sensitivity to the role of each channel adds value. 73% Of shoppers agree that an app s performance is key to how they think about a retailer Source: RetailMeNot This exercise was specifically focused on the tactics that form the foundation of a BOPIS shopping experience rather than taking an exhaustive look at app features and functionality. Knowing that 73% of shoppers agree that an app s performance is key to how they think about a retailer according to RetailMeNot, ensuring you have the desired shopping tools in place will best serve your shoppers as they utilize their apps to facilitate preferred omnichannel choices. After shopping on 30 retailer apps, here are our recommendations for providing exemplary customer service.

TOUT OMNICHANNEL CAPABILITIES Two out of five (42%) of the apps we examined promote the merchant s in-store pickup offering. That is actually down from 79% in 2015.

In-store pickup enables consumers in neighborhoods across the country to complete their mobile purchase more quickly and easily.

10 TOUT OMNICHANNEL CAPABILITIES Two out of five (42%) of the apps we examined promote the merchant s in-store pickup offering. That is actually down from 79% in BOPIS is no longer a luxury, but a basic requirement for omnichannel merchants. In-store pickup enables consumers in neighborhoods across the country to complete their mobile purchase more quickly and easily. Let shoppers know that BOPIS services are available by introducing it in the navigation, or as part of the overall experience. 42% Promote In-Store Pickup (Down from 79% of retailers in 2015) CONTINUALLY SHOWCASE STOCK STATUS Today s customers expect you to provide real-time inventory visibility. Shoppers want to know if the product is available before making the trip. Quantity is ideal but a baseline in stock can serve as a starting point. Ensure the user experience shows all the local stores so the customer can readily select the right location. According to our findings, 88% of the apps we examined show in-stock status, while 17% show store quantity. Ease of finding Inventory by store 1.16/3.00 (1=easy) Store Quantity 17%* *Based on subset of merchants Office Depot In-stock status 88%

PROVIDE INTERACTIVE STORE MAPS In-store mapping matters most in stores with large square footage and extensive assortments. We found that 13% of the apps we examined have in-aisle store mapping.

CUSTOMER SERVICE IS KEY 13% In-Aisle Store Mapping We found that 13% of the apps we examined allowed customers to use their mobile wallets, while 29% offered live chat capabilities.

We recommend that merchants integrate customer service elements such as these into the process at points where shoppers are likely to have questions, such as the product detail page and the

11 PROVIDE INTERACTIVE STORE MAPS In-store mapping matters most in stores with large square footage and extensive assortments. We found that 13% of the apps we examined have in-aisle store mapping. By including interactive maps as a part of your app, your in-store guests will find it easier to locate and purchase what they re looking for. CUSTOMER SERVICE IS KEY 13% In-Aisle Store Mapping We found that 13% of the apps we examined allowed customers to use their mobile wallets, while 29% offered live chat capabilities. What s more, 92% of the apps had contact information visible to the customer. We recommend that merchants integrate customer service elements such as these into the process at points where shoppers are likely to have questions, such as the product detail page and the shopping cart. 13% 92% Mobile Wallet Visible Contact Info 29% Live Chat (up 8%) Visual & Voice Search Voice Search AS EASY AS Your app should also creatively adapt for the on-the-go customer. Leverage the latest tools shoppers have become accustomed to, such as visual search and voice search, in order to facilitate a faster and more enjoyable in-store experience. KOHLS HOME DEPOT

12 PHASE 2: THE CHECK-OUT PROCESS A smooth and swift in-store experience is top-of-mind for omnichannel shoppers. Inventory transparency, along with clear and timely communication, should precede that store visit. There are essential elements that ensure that your visitors complete their transactions in short order. They include a combination of information, user experience and an emphasis on the details. Shoppers seek to have this information accessible and at their fingertips.

WE RECOMMEND THAT YOU TAKE THESE SIX STEPS TO CREATE THE ULTIMATE CHECK-OUT EXPERIENCE: 1 State the inventory of nearby stores and the pickup timeframe.

2 Provide clear details and flexibility within the check-out process. Offering multiple options for pickup suggest a customer-centric mindset.

13 WE RECOMMEND THAT YOU TAKE THESE SIX STEPS TO CREATE THE ULTIMATE CHECK-OUT EXPERIENCE: 1 State the inventory of nearby stores and the pickup timeframe. Include inventory and availability for all stores in a clear and concise fashion. Of the apps we examined, 93% showed enterprise-wide inventory, and 72% showed a pickup time on the product page. 2 Provide clear details and flexibility within the check-out process. Offering multiple options for pickup suggest a customer-centric mindset. Only 37% of the apps we looked at allowed someone other than the purchaser to pick the order up. But 78% included a pickup time frame in the cart. 3 Include the actual time the order will be available for pickup. Time is of the essence. Select a business model that supports your company but be cognizant of shopper expectations. Half of the apps we looked at had a pickup time of less than 1 hour from the time the order was placed, and 33% had pickup times ranging from 1 to 24 hours.

5 Order review must contain all relevant information. The details ensure a smooth shopping trip. Up-front visibility versus burying critical aspects is ideal for the customer.

14 WE RECOMMEND THAT YOU TAKE THESE SIX STEPS TO CREATE THE ULTIMATE CHECK-OUT EXPERIENCE: (continued) 4 Enable text notifications. As shoppers are mostly mobile, a text option for customer service information is advisable. Only 30% of the apps we looked at had text notification capability. 5 Order review must contain all relevant information. The details ensure a smooth shopping trip. Up-front visibility versus burying critical aspects is ideal for the customer. All the apps we looked at contained the pickup details, while 80% included the store phone number, 54% had store hours, and 33% added Google Maps. 6 The store location should be easily identifiable. While Target may call its store at 4466 N. Broadway St in Chicago Chicago Wilson Yard, customers who made a purchase there still need to know where that is. The store address and location should always be provided, as a corporate naming convention is not intuitive to shoppers.

15 PHASE 3: POST-PURCHASE COMMUNICATION Keeping the customer in the loop throughout the process with full store details and timely information is essential. Communication comes in many forms and it behooves retailers to remember that, as they are conducting many of their transactions on mobile devices, communication via text is important to this cross-channel, cross-device customer base.

2 Include all pertinent information in communications. There s no such thing as too much information.

16 HERE ARE FIVE STEPS YOU NEED TO TAKE TO PROVIDE THE PROPER POST-PURCHASE COMMUNICATION: 1 Provide a stellar experience via all touch points. BOPIS is a process where logical steps give consumers confidence that the product will be ready and waiting. Post-purchase messaging should be consistent whether it s via text, or in-app. 2 Include all pertinent information in communications. There s no such thing as too much information. It s not just about telling the customer that the order is ready for pickup, but telling the customer what she needs to bring with her, and where in the store she needs to go. 3 Don t forget to say thank you. Confirming the initial order in the communication breeds confidence that the order is correct, and the customer s time will not be wasted by going to the store.

Your customer should not be wandering around the store. 5 Consider a full-service strategy, like drive up/pickup.

17 HERE ARE FIVE STEPS YOU NEED TO TAKE TO PROVIDE THE PROPER POST-PURCHASE COMMUNICATION: (continued) 4 Alert the customer of the in-store pickup area. As all stores have different layouts, clear details on the pickup location can save shoppers time. Your customer should not be wandering around the store. 5 Consider a full-service strategy, like drive up/pickup. Think convenience and build in processes that can help differentiate your brand. For example, retailers from Nordstrom to Sears to The Container Store are offering their customers curbside pickup in certain locations.

18 PHASE 4: THE IN-STORE EXPERIENCE Create an in-store experience that smartly leverages technology, yet arms associates with the tools to deliver exemplary execution. Here s what we found in the field when we went to pick up our BOPIS orders.

SIGNS, SIGNS, EVERYWHERE A SIGN Signage guides and reinforces services, setting the stage for a

Retailers need to take advantage of desirable visual locations to remind shoppers of the BOPIS

Make sure counters can be found quickly and orders received in a timely fashion.

19 SIGNS, SIGNS, EVERYWHERE A SIGN Signage guides and reinforces services, setting the stage for a positive visit. But just half of the retailers we looked at had in-store pickup signage. Retailers need to take advantage of desirable visual locations to remind shoppers of the BOPIS service, including directing them every step of the way. Make sure counters can be found quickly and orders received in a timely fashion. Create signage that will guide shoppers while simultaneously reinforcing the value proposition of BOPIS. 50% In-Store Pickup Signage Office Depot Toys R Us DSW

While 32% of email confirmations we received had a barcode, we expect to see that increase as the use of kiosks increases.

20 MODERN TECHNOLOGY Merchants need to develop or adopt technologies that can augment the experience, serving as an alternative to a full associate-assisted model. They also need to ensure this technology is functional and welcoming for shoppers. While 32% of confirmations we received had a barcode, we expect to see that increase as the use of kiosks increases. Only 10% of the retailers we visited had self-serve kiosks with barcode scanners for in-store pickup. for pickups 10%Kiosk/scanner 32%of confirmations had a barcode Expect to see that increase as the use of kiosks increases

21 ENGAGEMENT AND EMPOWERMENT Enterprise-wide inventory is multi-dimensional. The ability to save the sale and add incremental items to an order is both good customer service and smart business using technology to optimize the experience. In the stores we shopped, we found that 90% of store associates had access to store inventory, and that 87% of associates could place orders via register (81%), mobile POS (19%) or tablet (7%). How well were the store associates trained to handle unified commerce capabilities? A little more than a quarter (27%) of the store associates sought help during the transactions. 90% Associates have inventory access 87% Associates can place orders Orders placed via: 19% 81% 7% Register Mobile POS Tablet Only 7% of store associates tried to save the sale

22 AND THE RESULTS ARE... 90% Product ready & waiting 57% Customer service counter used for BOPIS 83% Counter easy to find 43% 50% Associates located order <1 minute Associates located order 1-4 minutes

23 CONCLUSION Buy online pickup in store will evolve where experiences will become more sophisticated and shoppers more satisfied. Consumers who are taking advantage of these capabilities will only increase their frequency and we must be ready to accommodate this heightened demand with positive outcomes. Retailers who are on the sidelines can no longer wait to adopt this functionality and need to evaluate how to bring these capabilities to fruition. Readying one s stores and infrastructure takes smart planning, wise investment and a willingness to ensure success for retailers and consumers alike. For those already in the game, continually evolving best practices will foster long-term growth. BOPIS Must-Have Requirements and Areas of Improvement This mystery shopping study revealed where retailers are excelling with in-store pickup, as well as the areas that need improvement in order to deliver a superior shopping experience. If you are offering in-store pickup, or are about to embark on an in-store pickup implementation, what are the details you must offer to be successful, and where are the areas you can beat these 30 leading retailers? We invite you to review our summary of must-have requirements and areas of improvement on the next two pages, then fill out our report card at the end to grade your company in this in-store pickup area.

24 AVENUE OF PURCHASE What you must do: Must display in store stock Promote store pickup/reserve as part of the overall shopping experience Include BOPIS information in customer service/help Make sure third-party promotions don t hinder shopping Where you can improve Showing actual quantity of product available a value add If heavy SKU count and/or large store footprint, mapping is a time-saver Use platforms that intrinsically support mobile devices Have a real-time ATP engine PROFILES & PERSONALIZATION What you must do: Ensure profiling tools are accessible across all channels Localize the shopping experience including promotions Ensure the right content is visible from home page and accessible throughout the shopping experience Where you can improve Mobile wallet technology should be evaluated as capability evolves and/or industry adopts Efficient in store processes Evaluate live chat and other mobile engagement capabilities Leverage predictive merchandising to personalize the experience ORDER PREVIEW & COMMUNICATION What you must do: State time frame accurately for store pickups and list on both product pages and shopping cart Ensure pickup details are comprehensive including store hours, phone #, distance from location and mapping capabilities Provide clarity around where the store is Ensure assortment is consistent across channels (hint ATP) Where you can improve Show inventory status where all nearby stores with availability are presented Allow shoppers to designate pickup person (guest pickup) Embed notifications in apps Show a picture of the pickup counter

25 STORE EXPERIENCE What you must do: Make sure the associate really spends the time to make the store experience memorable Educate, put in practice, train, support the consumer on their new purchase Connect this purchase experience with other valued items and information Where you can improve Associate competence is critical along with a good attitude Be friendly, avoid multi-tasking and be helpful to all guests SAVE THE SALE What you must do: Build a better picture of the consumer by addressing all points of information CRM and data mashup of online and in store activity provides associate insight Offer a retail associate platform for employee associates to use in store Where you can improve Train associates to suggest alternative items in an effort to save the sale Check the stock status for a desired item across the enterprise and place orders for customers making the transaction quick and convenient

REPORT CARD If you are currently offering BOPIS, we encourage you to complete this report card. Be honest regarding your strengths and weaknesses and where you see room for improvement.

26 REPORT CARD If you are currently offering BOPIS, we encourage you to complete this report card. Be honest regarding your strengths and weaknesses and where you see room for improvement. Keep in mind the many insights from the report as you prepare this report card. Ensure you have the shopper vantage point top-of-mind. Grade Room For Improvement Apps The Check-Out Process Post Purchase Communication The In-Store Experience

This research study was powered by: Multichannel Merchant serves key decision makers responsible for ecommerce, management, marketing and operations at companies that sell

Multichannel Merchant delivers original research, as well as in-depth analysis of trends and best practices, news, tactical/how-to, executive summaries, technology and

other locations. The e-tailing group, inc., serves as the multichannel merchant s eye, bringing a merchant s sensibility to evolving the multichannel shopping experience.

channel as well as to enabling technology firms. The e-tailing group is now an Astound Commerce Company.

27 This research study was powered by: Multichannel Merchant serves key decision makers responsible for ecommerce, management, marketing and operations at companies that sell merchandise through multiple channels including ecommerce, mobile, social, and catalog. Multichannel Merchant delivers original research, as well as in-depth analysis of trends and best practices, news, tactical/how-to, executive summaries, technology and supplier comparisons, tip sheets and resource information, to help companies sell and deliver products wherever and whenever the customer wants them at home, work, store or other locations. The e-tailing group, inc., serves as the multichannel merchant s eye, bringing a merchant s sensibility to evolving the multichannel shopping experience. A Chicago-based consultancy led by Lauren Freedman, the firm provides practical strategic perspectives and actionable merchandising solutions to merchants selling across channel as well as to enabling technology firms. The e-tailing group is now an Astound Commerce Company. Kibo is the strategic merger of industry leaders, MarketLive, Shopatron, and Fiverun. With a combined 40 years of innovations, we re joining forces to help retailers and branded manufacturers unify the consumer experience. Kibo is a complete omnichannel commerce platform, delivering the lowest total cost of ownership and the fastest time to market.

THE STATE OF OMNICHANNEL COMMERCE: A Mystery Shopping Study

THE STATE OF OMNICHANNEL COMMERCE: A Mystery Shopping Study INTRODUCTION It s been years since retailers first grabbed hold of the idea of omnichannel retailing and fulfillment. Moving from multichannel